High-frequency indicators show broad-based rise in economic momentum: RBI

Monetary policy actions and the continued disinflationary stance are yielding results, RBI article says

- Shayan Ghosh

India's high-frequency indicators point to a broad-based gaining of momentum even as surging bond yields and rising crude oil prices have emerged as proximate risks to global growth, said an article in Reserve Bank of India's October bulletin. "Deleveraging and higher capacity utilization have enabled capital-heavy industries to gain traction," it said.

It said that the accumulated force of monetary policy actions and an unswerving disinflationary stance of withdrawing accommodation are yielding results but it is too early to declare victory.

Other positives include the fact that the Indian rupee is exhibiting low volatility; and inflation has moderated from its July peak, strengthening macroeconomic fundamentals. The rupee, it said, has also shown orderly movements relative to peers in spite of the elevated US treasury yields and a stronger US dollar. Movements in the rupee, the article said, are consistent with the strength of the underlying macro-fundamentals and the reassuring availability of buffers.